The opinion of the court was delivered by: GREENE
This case involves charges brought against former Congresswoman Mary Rose Oakar and her nephew, Joseph DeMio. The indictment alleges criminal violations in connection with the 1992 finance disclosure reports submitted by Oakar's re-election committee and alleged violations by Oakar in connection with the so-called House Banking Scandal. Now before the Court are a number of motions to dismiss, for severance, for grand jury disclosure, and for a bill of particulars.
Upon consideration of these motions, the oppositions thereto, the replies, and the entire record, the Court concludes as follows: (1) Counts One and Two will be dismissed; (2) the remaining five counts against Oakar will not be dismissed and will be tried together; (3) Oakar's motion to strike will be granted; and (4) DeMio's separate motions will be denied.
Oakar Did Not Violate Any clear House Standard
The first count charges Oakar with the criminal conversion of public funds, in violation of 18 U.S.C. § 641, in that she negotiated an insufficient funds check on her account at the House of Representatives Bank. Oakar claims that this charge suffers from several defects. As one of these -- which has to do with a non-existent standard of culpability--is dispositive, the Court need not address the others.
In United States v. Kolter, 71 F.3d 425 (D.C. Cir. 1995), the Court of Appeals upheld a prosecution for a section 641 conversion of public funds, but in doing so it made statements in the accompanying Opinion which serve to defeat the prosecution here.
Kolter was charged, inter alia, with conversion of public funds, the conduct underlying this charge being that Kolter made purchases at the House Stationery Store for which he improperly obtained reimbursement from Congressional funds. Id. at 428. The court stated that it had to be determined by reference to the House Rules whether or not the reimbursements were authorized. Id. at 431. Kolter moved for dismissal, claiming that the charge was non-justiciable because the House Rules did not provide judicially manageable and discoverable standards to be applied in determining whether his reimbursements were authorized. Id.
The prosecution cannot meet this test in this case. Oakar's alleged negotiation of a $ 16,999 insufficient funds check on her Sergeant-at-Arms account is not plainly in violation of the House Rules. As the government conceded at oral argument, there is no House Rule addressing overdrafts on House Bank accounts. Rather, the House Bank's credo was simply to serve the House of Representatives and never embarrass a Member of the House of Representatives. Def. Ex. 5 at 31.
In this connection, the Court of Appeals' ruling in United States ex rel Joseph v. Cannon is also instructive. 206 U.S. App. D.C. 405, 642 F.2d 1373 (D.C. Cir. 1981), cert. denied, 455 U.S. 999 (1982). In that case, the plaintiff filed a False Claim Act suit against Senator Cannon based on the Senator's authorization of salary payments to an aide who was performing campaign functions, rather than official legislative and representational duties. Id. at 1376. The court dismissed the claim, finding that there were no judicially discoverable and manageable standards for resolving the question of whether Senators may use paid staff members in their campaign activities. Id. at 1379. In arriving at this decision, the Court of Appeals focused on the fact that the Senate itself had tried, but had been unable, to reach a consensus on the propriety of using staff members in reelection campaigns. Id. at 1380-81. The court stated that the history of attempts to develop a suitable rule revealed the lack of a firm standard during the period relevant to the case. Id. at 1380. The same is true here.
It is especially noteworthy in this connection that a number of other Members of Congress cashed more and larger insufficient funds checks on their House Bank accounts and maintained larger insufficient funds balances than did this defendant. See generally Def. Ex. 4. In fact, it appears that there were hundreds of other Members who issued overdrafts, see Def. Ex. 2 at 35; Def. Ex. 5 at 2, and that Members wrote thousands of dollars worth of overdrafts. See Def. Ex. 2 at 2, 10. However, Oakar is the only House Member to be subjected to a felony section 641 charge. The government has failed give the Court any reason why other House Members, who had overdrafts much in excess of that with which Oakar is charged, have not similarly been prosecuted. While this fact is not ipso facto a defense to the actions of Oakar, it does highlight the critical fact that no clear Rule was in effect regarding overdrafts. Had there been such a Rule, presumably other prosecutions would have been instituted.
As the House has not been able or willing to formulate a Rule regarding overdrafts on House Bank accounts, this Court will not step in to supply the missing element and in effect usurp the House of Representative's authority by imposing a judicially-created rule. Whatever may be the result in an "ordinary" case, as the Court of Appeals noted in Kolter, a court must be especially careful not to overstep improper bounds where separation of powers problems are implicated. Said the court:
Where "a court cannot be confident that its interpretation is correct, there is too great a chance that it will interpret the Rule differently than would the Congress itself; in that circumstance, the court would effectively be making the Rules -- a power that the Rulemaking Clause reserves to each House alone."
71 F.3d at 431 (quoting United States v. Rostenkowski, 313 U.S. App. D.C. 303, 59 F.3d 1291, 1306-07 (D.C. Cir. 1995)). On this basis, Count One of the indictment must be dismissed.
Section 1001 Does Not Apply to Statements Made to the Legislative Branch
The second count charges Oakar with a violation of 18 U.S.C. § 1001, by the making of a false statement regarding a matter within the jurisdiction of an agency of the United States. More specifically, this count charges that Oakar filed a Financial Disclosure Statement
with the Clerk of the House of Representatives in which she omitted reporting some $ 50,000 in liabilities. With respect to this count, too, a recent appellate decision is directly on point, and it serves to defeat the prosecution's case.
In Hubbard v. United States, the Supreme Court ruled that section 1001 does not apply to false statements made in the course of judicial proceedings. 115 S. Ct. 1754, 1765, 131 L. Ed. 2d 779 (1995). In the view of the Supreme Court, there is no evidence that Congress intended a court to be a "department" within the meaning of the statute, which covers false statements within the jurisdiction of "any department or agency of the United States." Id. at 1760-61. The question here, of course, is whether the exclusion from section 1001 of statements by a defendant to the Judiciary also extends to statements made by a defendant to the Legislative Branch.
The Court of Appeals for this Circuit has provided an answer to that question. In United States v. Dean, 55 F.3d 640 (D.C. Cir. 1995), cert. denied, 116 S. Ct. 1288, 134 L. Ed. 2d 232, 1995 WL 753850 (1996), the court explicitly held that Hubbard had "narrowed the reach of § 1001 to matters within the executive branch, a coverage consistent with both the common usage of 'department' and that term's definition in Title 18." Id. at 659.
The government seeks to distinguish the instant case from Dean in that there the operative term was "department" while here it is "agency." However, in United States v. Rostenkowski, -- a case involving a charge of making a false statement to an agency -- the Court of Appeals stated, referring to Hubbard, that "a false statement made to the Congress is not within the ambit of the statute prohibiting false statements to 'any department or agency of the United States.'" 313 U.S. App. D.C. 303, 59 F.3d 1291, 1301 (D.C. Cir.), reh'g denied, 68 F.3d 489 (1995) (emphasis added). In denying rehearing in Rostenkowski, the Court of Appeals again noted that "Congress is not a 'department or agency of the United States' within the meaning of 18 U.S.C. § 1001." 68 F.3d at 489.
The government argues that Rostenkowski left to the District Court the question of whether charges alleging false statements made to the House Disbursing Office should be dismissed in light of Hubbard, and it further contends that the Clerk of the House of Representatives and the House Ethics Committee are "agencies" because they perform administrative functions. These contentions lack merit. The focus of the Court of Appeals' decisions, as well as of the Supreme Court holding in Hubbard, was on the distinction between the Executive Branch -- to which section 1001 applies -- and the legislative and judicial branches -- to which it does not. Although the Court in Rostenkowski held that the District Court was not required on remand to find that the House Disbursing Office was not an "agency" within the meaning of section 1001, see 68 F.3d at 490, the Court of Appeals decisions themselves all but compel this result.
In any event, this Court concludes that in light of the legislative history as reviewed by Hubbard,5 section 1001 was not intended to apply to the statements at issue here, which were made to the House Clerk and then forwarded to a Congressional Committee. See United States v. Hansen, 906 F. Supp. 688, 695-96 (D.D.C. 1995) (statements made to House not chargeable under section 1001); United States v. Watt, 911 F. Supp. 538, 1995 WL 739875, *2 (D.D.C. Dec. 4, 1995) (statements made to House subcommittee not chargeable under section 1001). The government's narrow focus on the specific functions performed by various subparts of Congress or of the Judiciary is unavailing. Accordingly, Count Two will be dismissed.
False Statements Made to the FBI and the Federal Election Commission Violate Section 1001
Oakar also relies on Hubbard with respect to Counts Three and Seven (subpart A below) and Counts Four through Six (subpart B below).
A. Count Three charges Oakar with making a false statement to an FBI agent regarding the delivery of three stop-payment orders to the House Bank. Count Seven alleges that Oakar submitted a letter with a false date to the FBI. In this Court's view, the Hubbard rule does not reach so far as to exclude these statements from section 1001's ambit.
The FBI is of course an Executive agency, see United States v. Rodgers, 466 U.S. 475, 479, 80 L. Ed. 2d 492, 104 S. Ct. 1942 (1984), and Hubbard therefore does not, by its own terms, shield a defendant from false statements made to the FBI. Oakar counters that the FBI was assisting a grand jury when the FBI agent questioned her, and that the FBI was therefore carrying out a judicial function. To be sure, the Special Counsel secured a grand jury subpoena to the House Sergeant-at-Arms for the account records of Member account holders, including Oakar's. The House ultimately agreed to provide voluntarily the materials sought by the grand jury subpoena.
After the records had been secured, the FBI reviewed them and interviewed some Members. Oakar made the statement at issue in Count Three during the course of such an interview with an FBI agent. Thereafter, Special Counsel issued a "clearance letter" with respect to several Members who were cleared of wrongdoing, but investigations continued against Oakar and other Members who did not receive clearance letters. Oakar made the statement charged in Count Seven during these subsequent investigations.
In the Court's view, these statements are properly chargeable under section 1001 because the investigation was a matter within the "jurisdiction" of an executive "agency." The Supreme Court has held that a criminal investigation falls within the meaning of "any matter," and that the FBI is a "department or agency" of the United States. Rodgers, 466 U.S. at 479. Furthermore, the Court has held that "the term 'jurisdiction' should not be given a narrow or technical meaning for the purposes of § 1001." Id. at 480 (internal quotations omitted).
With respect to the statement charged in Count Seven, the Court similarly concludes that there is no basis for determining that this investigation was carried out at the behest of the grand jury. This was a continuing investigation that began with the clearance letter procedure. There was no additional grand jury subpoena, nor is there any indication that the grand jury directed the FBI to continue its investigation. For these reasons, the Court will not dismiss Counts Three and Seven on the basis of Hubbard.7
B. As indicated, defendants cite Hubbard as authority for the requested dismissal of Counts Four through Six. Count Four charges the defendants with a conspiracy to violate section 1001 by concealing from the Federal Election Commission ("FEC") the amounts of various contributions that were made in excess of the maximum amount allowed by law. Count Five charges Oakar with filing statements with the House Clerk that falsely named several individuals as contributors to Oakar's campaign. And Count Six charges Oakar with causing a statement to be filed with the House Clerk that omitted the reporting of at least $ 5,980 in expenditures. Defendants argue that these counts, involving statements initially submitted to the House Clerk (for eventual transmittal to the FEC), should be dismissed under Hubbard because they involve a hybrid legislative-executive scheme. The Court disagrees.
As noted above, the Supreme Court has explained that "jurisdiction" as defined in section 1001 is to be interpreted broadly. It follows that section 1001 would be applicable to statements made regarding matters over which an executive agency had authority. It is not necessary that the executive agency have exclusive authority, and "there is no implicit requirement that the statements be made directly to, or even be received by, the federal department or agency." United States v. Gibson, 881 F.2d 318, 322 (6th Cir. 1989); see United States v. Oren, 893 F.2d 1057, 1064 (9th Cir. 1990). "It is, however, necessary under section 1001 that the ...